US loses first CAFTA-DR labor arbitration, provides guidance on effective enforcement of labor law
What is it about?
U.S. free trade agreements have included labor clauses since the 1994 NAFTA, but do they actually work? This commentary examines the first international arbitration decision in which the U.S. charged Guatemala for not effectively enforcing its labor laws under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). Although the U.S. lost to Guatemala, the decision provides important guidance on what must be proven to prevail in future cases and on the meaning of effective enforcement of labor law under CAFTA-DR and other U.S. free trade agreements.
Why is it important?
This commentary distills the main points of the 200-page arbitration decision, discussing each element of proof that must be made under CAFTA-DR's labor clause to demonstrate that a country has not effectively enforced its labor laws in a manner affecting trade. The commentary zeros in on the key issue of the difficulty of assessing and submitting evidence from workers and trade unions in an international trade proceeding. Critically, the commentary is accompanied by an abridged version of the arbitration decision consisting of 16 pages of the key paragraphs in the decision.
The following have contributed to this page: Tequila Brooks